Apple’s iPhone 5 Event Created BIG Trade Swings in These Stocks

The long-awaited day finally arrived. On Wednesday, Apple (NASDAQ:AAPL) held its special event in San Francisco where the tech giant unveiled its new iPhone 5. The new smartphone features a taller screen with Retina display, thinner and lighter body and LTE wireless technology. While the iPhone 5 was the star of the show, the new features had day traders frantically trying to figure out what it meant for other companies in the market.

In regards to hardware, the iPhone 5 has an A6 processor that is up to twice as fast as the A5 chip found in the iPhone 4S. Apple explains, “So you can power through graphics-intensive apps and games. And enjoy higher frame rates for smoother, more realistic gameplay.” In order to show off the new capabilities, Apple had Rob Murray, executive producer from Electronic Arts (NASDAQ:EA), take center stage and show a Real Racing 3 demo, its upcoming title for iOS.

As soon as traders and their respective algorithms heard Apple introduce EA at the iPhone 5 unveiling, shares of the video game developer spiked on very strong volume. As the chart below shows, shares quickly popped almost 3 percent to hit $14.15, after previously trading near $13.75. Although shares hit their highest level since May, they slowly gave back some gains as traders digested the news.

Apple also improved the iSight camera for the iPhone 5. It now contains a new panorama feature that allows users to shoot up to 240 degrees in one smooth motion. The camera also has 40 percent faster photo capture, better low-light performance and improved noise reduction. When Apple started talking about the camera enhancements, shares of Shutterfly (NASDAQ:SFLY) immediately dropped from $30.50 to $29.55, representing a 3.1 percent move. However, shares recouped all of the losses and closed even higher at $31.27.

Last week, Pandora (NYSE:P) shares plummeted nearly 20 percent after a report indicated that Apple is currently in talks to license music for a custom-radio service that would directly challenge Pandora. As a result, traders were on edge for anymore hints about the service Wednesday. Tim Cook appeared on stage and said, “We have something else to talk to you about today, and that is music.” That was all it took to send Pandora shares lower to $9.50. However, Cook was not talking about a new music subscription service. Instead, Apple introduced a redesigned iTunes store and new iPods. Naturally, Pandora shares reversed higher to $10.40 before closing the day at $9.97.

Perhaps the only clear justifiable sharp move from the Apple event came from Skullcandy (NASDAQ:SKUL). The headphone and earphone company fell from $14.80 to $14.20, as Apple announced a new listening device called EarPods. Apple explains, “Unlike traditional, circular earbuds, the design of the new Apple EarPods is defined by the geometry of the ear. Which makes them more comfortable for more people than any other earbud-style headphone. The speakers inside Apple EarPods have been engineered to minimize sound loss and maximize sound output. So you get high-quality audio that’s just as impressive as what you’d hear from more expensive headphones.” Skullcandy shares did not recover by the end of the trading day.